I. Economic Trends
The Korean economy maintained moderate growth momentum on the back of a pick-up in domestic consumption despite the worsening decline in overseas demand. In terms of external transactions, exports decreased due to the economic downturns in emerging economies while receding oil prices also dampened imports. However, as imports dropped more than exports, the current account continued to record a surplus. The number of workers significantly increased thanks to the sharp rise in newly employed persons in the business, public and personal services sector. The inflation rate in December 2015 rose 1.3% year-on-year as service prices increased further even as petroleum prices continued to drop due to low oil prices. In December 2015, the monthly average of 3-year treasury yields stood at 1.72%, similar to the previous month, and the won to dollar rate was 1,172 won for the monthly average, increasing 20 won from the previous month as the yuan to dollar rate surged.

II. Deliberation on the 2016 National Budget Proposal and Outlines of the Fixed Budget Plan
The National Assembly has revised gross revenue in 2016 down by KRW 244 billion to KRW 391.2 trillion, after adding KRW 80.2 billion and cutting KRW 324.2 billion, respectively, from the government’s proposal. The gross expenditure has been lowered by KRW 306.2 billion to KRW 386.4 trillion won, after adding KRW 3.5219 trillion and cutting KRW 3.8281 trillion, respectively, from the government’s bill. Gross revenue and gross expenditure have been revised down less during the National Assembly deliberation this year than the 2015 review session (KRW 400 billion and 600 billion down in gross revenue and gross expenditure, respectively).
  There are 10 sectors that have had their final budgets increased from the government’s proposal for FY2016. They include public health; welfare and employment (KRW 500 billion); SOC (KRW 400 billion); R&D (KRW 200 billion); and industry, SMEs and energy (KRW 200 billion) in decreasing order. Decreased budgets from the government’s bill are appropriated for two sectors—general and local administration (△1.4 trillion) and national defense (△200 billion).

III. Major Issues and Tasks of the Introduction of the Wage Peak System at Public Institutions
In order to cope with the extension of the retirement age of public institutions to 60 years of age from 2016, the government developed the recommendation of the wage peak system in May 2015 and instructed all public institutions to introduce the system. It is highly essential for public institutions to adopt the wage peak system given their seniority-based wage system, long duration of employment, and high proportion of older employees, and when the payroll costs saved through the wage peak system are invested in new recruits, this will contribute to boosting youth employment. More specifically, it is also necessary to relax the ceiling in the increase rate of total labor costs based on the labor structure or wage system by organization and promote the merit-based wage system, thus resolving discrepancies between labor productivity and the payroll system. In addition, it is also necessary to consider extending the timeline of the “Youth Employment Quota System,” which will be temporarily implemented through 2016, till 2018 or 2019, when the extension of the retirement age will produce a stable result.

IV. Directions and Future Tasks of Policies Related to the Fintech Industry
Fintech, or financial technology, refers to businesses that offer more efficient financial services through leveraging IT technology. The global investment in the fintech market increased three-fold over five years, from USD 930 million in 2008 to USD 2.97 billion in 2013. In Korea, the introduction of equity-based crowdfunding (from January 25, 2016) and the Internet primary bank (to be introduced in 2016) is expected to contribute to creating jobs and serve as a new engine of growth, given the lessons from major countries. In order to ensure that the fintech industry in Korea, a global powerhouse of ICT technology, gains a competitive edge in overseas markets, it is necessary to strengthen the mutual links between the fintech and ICT industries, including the expansion of the fintech cluster.

V. National Tax Revenue Collected During January-November 2015
The accumulated tax revenue as of November 2015 stood at KRW 206.2 trillion, increasing KRW 16.8 trillion, or 8.9%, from KRW 189.4 trillion in the previous year. The tax revenue in 2015 showed a rebound from the sluggish tax revenue in 2014 (1.8%) thanks to the rises in property and securities transactions, price increases for cigarettes, and toughened tax enforcement. By tax item, the increase in income tax, including transfer income tax, drove up total tax revenue, and revenues from corporate tax, individual consumption tax, and security transaction tax showed good performance.